Find out what a credit score is, what it means, and why your credit score matters. You'll also learn how a credit score is calculated, and ways you can keep track of your credit score. Oh, and it's Credit Squirrel who will be teaching you all this.

1. BROUGHT TO YOU BY
Breakdown of a
CREDIT SCORE

2. Before
CREDIT SCORES
• No standard for measuring risk
• Up to individual lenders to judge
loan applicants

3. What is a
CREDIT SCORE?

4. A credit score is a number used by financial
institutions and credit card companies to
determine your risk-level when issuing a
loan or a credit card.

5. The FICO score is the most
widely used credit score
model in North America.
It was introduced in 1989
by Fair, Isaac and Company.
It’s also known as the
Beacon score in Canada.
FICO
Fair, Isaac and Company

6. EQUIFAXTRANSUNION
Since each credit bureau uses
its own formula, your FICO
score can vary depending
on which bureau supplies the
information.

7. What does my score
MEAN?

8. Most credit scores are between 350 and 800
350 800

9. LOW (<550)
A low score means you could be
denied a loan or a credit card
350 800

10. 350 800
MIDDLE (550 to 720)
You might get approved for a loan,
but at a higher interest rate

11. 350 800
PRIME (720+)
Loan approval at the best rates.
This is where you want your score to be

12. Why does my score
MATTER?

13. Renting an
Apartment
Student
Loans
Job
Applications
Car
Payments
Credit scores can influence:

14. How are credit scores
CALCULATED?

15. The breakdown of a credit score goes like this:
10%Mix of
Credit
35%Payment
History
30%Capacity
10%New
Credit
15%Length of
Credit

16. Making payments on time
boosts your score
35% PAYMENT HISTORY

17. •How much of your available
credit you actually use
•The less you use, the better
•Maxing out your lines of
credit harms your score
30% CAPACITY

18. A long history of good credit
habits raises your score
15% LENGTH OF CREDIT

19. •Opening a bunch of new
credit lines in a short amount
of time hurts your score
•This includes retail
credit cards
10% NEW CREDIT

20. •Revolving credit
(ex. credit cards)
•Instalment loans
(ex. mortgages, car loans)
10% MIX OF CREDIT

21. How do I keep track of
MY SCORE?

22. You can request one free
credit report per year
from each of the major
credit bureaus.
Visit annualcreditreport.com
to get started.

23. Space out your requests
by a few months so that
you can check on your
credit year-round.

24. Things to look for on
your credit report
that influence your
credit score:
• account openings
• account closings
• repayment history
• mix of credit

25. Access through a major credit bureau for a fee
(usually $15-$25)
Get a free estimate (not the same formula as FICO,
so it won’t be exact) through creditkarma.com
$$$
$0
Need access your credit score?
(you won’t find it on your credit report)

26. Sources: FICO, Forbes, Financial Consumer Agency of Canada.
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